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Tuesday, December 30, 2014

Social Security Benefits

Ever wonder how the Social Security office compiles your benefit amount? Well, believe it or not, there is a formula that is followed. And don’t worry, even though you only made $2,500 for the year back in 1962, the Social Security office does index for inflation. The easiest and simplest explanation of figuring your retirement benefit can be found on the Social Security website. Some other potential unknowns in addition to indexing for inflation include: Social Security uses your highest 35 earnings years for its benefit calculation and allows people to receive their benefits before their full retirement age-as early as 62. Benefits are reduced by a certain percentage however, if received before full retirement age. For help in estimating your benefit, set up your personal Social Security account, or read this  2 page Social Security document.

Social Security income is typically a large component of a financial plan. Be familiar with the program and how it works and talk to your financial advisor about how Social Security income fits into your goals!

Monday, December 1, 2014

Car Loans

I was reading this article about the length of car loans and thought I would give my thoughts:

Let’s harken back to 5-6 years ago when lending standards for cars, mortgages and other loans were very strict. Now, the above article says 6 and 7 year car loans are becoming more common. Folks, 84 months for a car loan is wild. Please consult with your advisor before jumping into decisions like this.

Monday, November 24, 2014

Celebrating Independence

In the financial services industry, independence is a relative term. How do you know if your advisor offers independent advice? When we began discussing starting a financial firm, one of the most important criteria is that we would offer independent, objective advice. Before Argus Financial Consultants even had a name, our decision making was driven by the concept that we would be employed by our clients and that our success would be measured by the success of our clients. Here are some indicators of our independence:

· We have a self-directed practice. All decisions about our business practices are made locally by the Partners and employees of Argus Financial Consultants.

· We are not subject to outside sales goals or quotas.

· We have full autonomy to make recommendations based on client need and suitability.

· Our broker/dealer, LPL Financial, offers no proprietary investment products. Additionally, LPL Financial makes available thousands of investment options through agreements with the nation’s leading providers of investment products.

Now, as Argus Financial Consultants approaches its eighth anniversary, we continue to believe that our independence is critical to providing the highest quality service to our clients. We have no doubt that what we may forgo in additional revenue and incentives; we more than make up through stronger, trusted client relationships and referrals.

Monday, November 3, 2014

Public Wi-Fi - When to Use and Not to Use?

Many times I've found myself sitting in a coffee shop wondering if the public Wi-Fi is safe. I typically go back and forth in my head and then decide to just use my phone as a mobile, password protected hotspot even for innocent personal web browsing. It’s articles like this, from well-respected technology expert Kim Komando, that continue to reaffirm my decision. According to her, using public Wi-Fi networks can be safe, but it doesn't seem to be worth the risks if other options are available. Hackers can find many ways to access your personal data. If you are accessing personal data or sending emails, “free Wi-Fi” doesn't seem worth the cost.

Monday, October 27, 2014

Talking to Your Kids about Money

A few months ago I was driving my 10 year old daughter to an event and I mentioned something about saving money for college. She asked me why we needed to save for it and why we didn’t just pay for it when she went. After stumbling around for an answer that a 10 year would understand I said that it was very expensive and if we saved a little bit now, then we wouldn’t have a large bill when she went to school. This prompted an extended discussion about saving money for retirement, college, vacations and other things we want to do. It was a great opportunity to instill some values and build a foundation for many future discussions. Fast forward to a week ago when the kids had a lemonade stand. I came home and they had made $15! I think I made $1 when I did mine years ago. The first thing she did was count it up and put some in her piggy bank “savings” and some in her envelope to spend. I like to think that came from our little discussion in the car. I urge you to talk to your kids about money and it is never too early to start.

Wednesday, October 22, 2014

When Should I Take Social Security?

This happens to be one of the most common questions I am asked when sitting across from retirees. The answer obviously depends on a person’s specific situation, but the numbers from a recent T Rowe Price study make an interesting argument of a split strategy. This article discusses having the lower income spouse start their benefits early and having the higher earning spouse waiting until 70. Every year a retiree waits to take social security provides them with a higher income the next year up until age 70. Again every family’s retirement situation is unique, but the “when to start taking social security” question can be one of the biggest keys to properly funded glory years.

Monday, October 13, 2014

It's Harvest Season!

Last Saturday, my daughter and I went to the local farmer’s market. What a great time of year to live in Michigan. Our local farmers are harvesting sweet corn, blueberries, peaches, cherries, tomatoes and many others of the Lord’s gifts. The flavors of this time of year are outstanding and it has been a good season.

It has also been a good season for some investments. As we move into fall, we begin to think about harvesting gains and losses. In most cases, our capital gains are harvested for us by our professional investment managers. In some cases, we have more control. This could be important depending on our tax situation for the year. Also, we may have some unrealized capital losses that could be harvested to offset other capital gains.

While it is important to review taxable investment accounts for opportunities to harvest both capital gains and losses, it should be done carefully to make sure the rules are followed. Also, taxes should not be the only consideration in deciding whether or not to sell or hold a particular investment. Your financial advisor and your tax professional should both be consulted.


This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax advisor.

Monday, September 29, 2014

Thoughts on Leaving a Roth to Your Heirs and Roth Conversions

I recently read an article in the Wall Street Journal about some potential changes in the Roth IRA. President Obama’s 2015 budget would require a Roth distribution at age 70.5 and also not allow beneficiaries to stretch out their inherited IRAs. Click here to read the article. As always it is best to discuss these types of planning items with your advisor.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual, nor be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Withdrawals from the Roth IRA account may be tax free, as long as they are considered qualified. Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

Monday, September 22, 2014

How Do I Optimize My College Financial Aid Chances?

We've written previously about the college financial aid process and what EFC (expected financial contribution) means in the eyes of financial aid offices and colleges and universities. The question of trying to optimize the chance of qualifying for financial aid has come up quite a bit recently in my client conversations. The topic will only continue to become more popular as college costs continue to rise at a faster rate than inflation. A common piece of advice is that you cannot wait too long to start planning. Start now even if you have young children. As your children get older and closer to the application process every decision can be an important one. As you can read in the recent Wall Street Journal Article the way you finance or do not finance your car could affect your financial aid position.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Thursday, September 4, 2014

Back to School Lessons

Many of our clients have been sending their kids to college in the past month. This can be an emotional, stressful, and exciting time. In addition to learning Medieval Art History and Global Food Ethics, they will also be learning a lot about being independent adults. One of the hardest things for some of them to learn will be to get themselves up in the morning and go to class.

Skipping class can be a big problem for new students. Studies show that class performance and degree completion are directly related to attendance. How do we encourage our students to attend when we can’t drag them out of bed ourselves? 
 
Maybe it would help a little to calculate how much you or the student is paying for each class. For example, if their classes meet 15 times per week for 14 weeks they would have a total of 210 classes to attend. If the tuition for the semester is $10,000, they would be spending/borrowing about $48 per class. Every time they skip a class, they waste $48. To some, this may help them get a firmer grasp on what this education costs. The more they value each class, the more likely they are to attend.

Tuesday, August 26, 2014

Going Paperless

Argus Financial Group clients can now use the LPL online system to store and view important documents using the My Documents feature. These documents are stored in a confidential and secure manner and can then be retrieved to view any time you log in. This is a great way to store and back up documents such as your wills and trusts, tax returns, or insurance policy benefit pages. Think of it as a virtual vault. In order to use this feature, we need to set it up for you. Send an email to Joy at Joy@eyeonargus.com if you have any additional questions or want to set it up.

Also, don’t forget to choose the paperless statement and prospectus options to save paper and improve the confidentiality of your information.

Monday, August 18, 2014

529 College Withdrawal Information

As fall comes and tuition is due many people are asking about withdrawals from their 529 plans. The below article gives 6 potential “traps” as you withdrawal money. Please make sure to discuss with your advisor to maximize your plan.
http://www.savingforcollege.com/articles/avoid-these-529-withdrawal-traps?page=1


This article is provided for informational purposes only. The information in this article is believed to be reliable, but no representation is being made as to its accuracy and completeness. Please consult your financial advisor for further information.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Wednesday, July 30, 2014

For More Than a Rainy Day

Over the years, I think I have seen almost every type of financial emergency, either personally or professionally. Some are relatively small, like the time you took your car in for an oil change and ended up with $1,200 in repairs. Some are big, like the loss of a job or an unexpected medical issue. Regardless of the situation, they cause family stress and can pressure you into making poor financial decisions. This is why one of the basic recommendations that we make with all clients is to maintain an adequate emergency or rainy day fund.

Calculating the right amount to maintain in an emergency fund is an important exercise. Why? Because you don’t want to be caught without enough to cover your emergencies, leading you to use expensive credit cards or pay taxes and penalties to withdraw from your retirement accounts. Also, having too much in a rainy day fund hurts your long term planning. These are funds that could be invested instead of sitting in a savings or checking account.

A general rule of thumb is three to six months of monthly living expenses. While this is a nice starting point, there could be other important factors:
  • Health: Do you or your family members have health concerns that could result in lost time at work? Could you be needed to take time off to care for a relative?
  • Job Security: Some jobs are more secure than others. Is your family dependent on one income earner? Does your income fluctuate?
  • Budget Flexibility: Are you able to “cut back” if necessary? Do you have a lot of monthly payments?
  • Investment Liquidity: Do you have assets that can be converted to cash? Are all of your assets in real estate or retirement plans?
Some people feel more comfortable with a little more in the bank that they can get at easily. Your emergency fund acts as an important buffer for your other investments and retirement accounts. Even though you earn little on the emergency savings, they play an important role in your overall planning allowing for increased financial confidence and maintaining a focus on long term goals.

Wednesday, July 16, 2014

Changes Coming to Your 401K

In early July the US Treasury released a ruling allowing annuity purchases in your 401k. As you review your 401ks please contact us to help you navigate these changes and how they affect you. Below is the article explaining the changes:
http://www.bankrate.com/financing/retirement/treasury-oks-annuities-in-401ks/

Tuesday, July 8, 2014

You Think You Know What to Expect during Retirement?

I am going to travel.  I am going to go back to work.  I am going to retire at 65.  We are going to spoil our grandchildren. We are going to purchase another home down south.

All of these responses are common themes when it comes to helping people prepare for retirement. The biggest advice we give, however, is to expect the unexpected. The Wall Street Journal published a fantastic article on May 24, 2014 describing some of the common unforeseen retirement circumstances. One of the most common occurrences I come across is people retiring earlier than they had planned. There could be an early buyout option, company downsizing, or a health concern, but the bottom line is that retiring before a planned date happens quite often. I like to attribute it to seeing the finish line and knowing that the end is near, that’s when the justification process begins. When it comes down to it, will the extra year of work really make a difference in the retirement spending? What if the stress of the extra year of work takes years off the retiree’s life? Each retirement situation is different and a financial advisor can be very useful throughout the process. Wouldn’t you rather consult with someone who has helped others navigate similar scenarios? Experience and expertise can be a great asset during a time that most people have been planning for all of their life, but have yet to conquer.

Tuesday, July 1, 2014

Lost and Found

Remember in elementary school when you came home from school with only one mitten. You were immediately sent to the office to look through the school’s lost and found. A giant box with a hodgepodge of orphaned mittens, shoes, jackets, and hats. If you were lucky, you found your mitten. At best, a 50/50 shot.

It is a little more complicated with lost savings and investments. Believe it or not, this does happen. Most commonly, it is a small retirement plan from an old employer long forgotten. Often, the original owner has passed away along with clues as to the whereabouts of the account.

After a while, the investment company passes on the information to the state’s Unclaimed Property Department. In Michigan, this is part of the Department of Treasury. In addition to the state programs, there are private firms that help people find lost property, for a fee. The fee is often up to 20% of the value of the account.

When you were in school, your parents may have safety pinned your mittens to your coat or maybe you had those mittens that were connected by a cord that ran through your coat sleeves. Either way, you were protected against loss. With investments, there are some ways to prevent the loss of your accounts also:

1. Minimize the number of different accounts that you have. Consolidate types of accounts such as IRA’s and savings accounts so that it is easier to keep track.

2. If your leave an employer, make sure you rollover your retirement account.

3. Make sure your accounts are up to date with your address and other contact information.

4. Keep a list of all savings and investment accounts in a safe place or with your financial advisor. Keep it up to date.

5. Check the online database of unclaimed property. The Michigan Department of Treasury maintains a searchable database called Michigan Money Quest at www.michigan.gov/treasury.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Monday, June 23, 2014

Titling Assets for Routine Estate Planning

June marked 15 years in the financial business for me. I continue to see significant mistakes in planning by folks daily. Let’s discuss the titling of assets in an effort to expedite the transfer process.

Checking/Savings account:  Do these have a joint holder or have you added a TOD (transfer upon death) person to the account?

Safety Deposit box:  Is this in your name only or is it in the trust’s name? If it is in your name only, your heirs will need a legal document (not your trust) to open it.

IRAs:  Are adult children the primary beneficiaries? This is typically the best practice. Trusts are named for minor children and adult children that you do not want to inherit the money right away.

Life insurance:  Who is the owner and the beneficiary? Is only one child the beneficiary but you have multiple children? Naming them all is a better practice than paying it to one and having them dole the money out (too much room here for squabbling).

Other Investment Accounts:  Are these accounts jointly held, in a trust, or have a TOD?

If you have questions please contact your financial professional at Argus Financial Consultants for a beneficiary and titling discussion.


This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.

Monday, June 16, 2014

Are Home Prices Really Going Up in Grand Rapids?

If your neighborhood is like mine, you have seen a couple of houses go on the market recently only to have a “pending” sign a week or so later. I stumbled upon the following link on the Grand Rapids Association of Realtors (www.grar.com) website last week and found it very interesting. Each month stats are posted about prior months sales. Despite the abnormally cold and long winter I noticed that the number of listing were up for April and the average sale price was up significantly from a year ago. I also noticed the average months of inventory is way down, which may help to explain the quick sale of houses. I’m anxious to see what next months numbers look like!

Monday, June 9, 2014

To Be or Not To Be Generous

There seems to be a lot of confusion about making gifts to family and friends. Not surprisingly, since the law has changed a lot over the years. Here is a basic rundown:

· In 2014, an individual can give $14,000 to another individual without gift taxes.
· Married couples can combine their annual gift exclusion amount and gift $28,000 to another person.
· An individual can pay tuition for the education of another individual without incurring a gift tax. The payment must be directly to the qualifying school/college.
· An individual can pay for medical expenses or medical insurance for another individual without incurring a gift tax. The payment must be directly to the provider or insurance company.
· Gifts made to a spouse who is a US citizen are not subject to gift taxes.
· The gift tax is the responsibility of the person making the gift. The person making the gift files with the IRS and pays the tax.
· Gifts to charity or a political organization are generally not subject to gift tax.

Even if you make a gift of a value greater than $14,000 this year, it is very unlikely that you will actually owe a gift tax. The excess gift will reduce your lifetime gift tax exemption. In 2014, the lifetime gift tax exemption is $5.34 million and it is indexed for inflation. So, you can see, most will not use up their lifetime exemption.

Another completely separate issue in gifting is the Michigan Medicaid rules. Gifts made in the five years prior to needing nursing home care could cause the state to deny Medicaid benefits for a period of time. It is important to consult a financial, tax, and estate professional before making high value gifts.

Tuesday, June 3, 2014

Reviewing Your Tax Return

Now that tax season has ended it is time to review your tax return. As always I am not an accountant, so please check with your tax professional for any tax advice.

There are two deductions I have seen that are done incorrectly on tax returns. The first is the 529 state tax deduction for contributing to your states 529 plan. One of the reasons this one does not find it on the tax return is because it is self-reported. You must add up your contributions and provide them to your accountant. The other reason why this is not reported is that not all accountants know the rules for each state. I had a situation recently when the client’s accountant was in a different state than where the client lived. The client is now amending prior year returns as they missed tax deductions for a number of years.

The second one I see done incorrectly is the HSA deduction. If you are contributing to an HSA through your employer it will most likely be on your W2 in box 12. This number is your contribution plus your employer’s contribution. If you have made a direct contribution outside of your employer’s plan you need to communicate this to your accountant.

Good planning involves tracking and making sure your financial transactions are reported. If you have questions about any of the above items please let your financial professional at Argus Financial Consultants assist.


This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Monday, May 12, 2014

I Make Too Much Money to Contribute to a Roth IRA…Or Do I?

A question that comes up in our planning process with clients on a regular basis; can I contribute to a Roth IRA? Well, technically the contribution phase out range for a married couple filing jointly for 2014 is between $181,000 and $191,000. But, there is a way for couples to potentially be able to contribute to a Roth IRA. A non-deductible contribution can be made to a traditional IRA and then be converted to a Roth IRA contribution. More information can be found on the IRS website including necessary tax forms that must be filed. There are restrictions, stipulations and aggregate rules that may apply if the investor already has a Traditional or Rollover IRA described in IRS Publication 590. The bottom line is that Roth IRA contributions could be a possibility in spite of a person’s income. Make sure to consult your financial advisor and tax advisor for more details.


Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Monday, May 5, 2014

Passing Assets to the Next Generation

I recently had the unfortunate (and rather common) experience of losing both grandparents in a short amount of time. The crazy twist in this story is their deaths were not accident related, only one of them was sick, yet they both passed away within 72 hours of each other. When deaths arise, and especially when they happen so suddenly, it can be very difficult to pass the assets on to the next generation just like grandma and grandpa wanted. Most people are familiar with the liquid assets, but what many people fail to account for in estate plans are the illiquid assets or “stuff” of the deceased. How do grandma and grandpa’s sentimental items get passed to future generations?

Recently, I came across the will of another elderly couple. Interestingly enough, they had all the liquid assets accounted for, but they also had all of their belongings accounted for as well. They had each child listed and what items would belong to them. There were pieces of jewelry, art, furniture and other family heirlooms assigned to each child. I thought, wow, doesn't this make the post death family meeting easier? It may lead to some exciting family bartering, but at least there would be no argument over “who mom or dad would have wanted to get this particular item!”    

Monday, April 28, 2014

My Kids Are Grown up, Now What?

My kids are now in their mid 20’s, do I still need a trust? If so, who should now be the trustee? Should my estate plan be updated again now that my kids are not minors?

These questions and many more are part of our normal client review discussions. I recently had a conversation with a family who had developed an estate plan when their kids were pre-teens. Part of this estate plan involved a trust with an extended family member named as trustee. The kids are now in their mid 20’s and starting their own careers. The question arose of the necessity of having an extended family member as trustee even though the two kids are now perfectly capable of managing their own assets. Is a trust still necessary? We concluded that a review with the estate planning attorney was the next step. Just as we review our insurance information and investment strategies on a regular basis, we also need to make a habit of reviewing our estate plan.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.

Monday, April 14, 2014

Still Learning After All These Years

Over the years, I have often been asked about the educational requirements to be a financial advisor. Unlike other professions such as pharmacists, engineers, or medical doctors, this question is a little tricky. Technically, there are no education requirements. Anyone can put out a shingle and charge a fee for advice.

There are licensing requirements for those that deal in securities or insurance transactions. Licensing requires ongoing continuing education in order to maintain. Classes that prepare candidates for the general securities registration take approximately one week to complete.

Professional designations show that an advisor has completed some additional training. These are the various combinations of letters that appear after the advisor’s name. There are over 60 professional designations in the financial services industry, some require only a few hours of preparation and some require several years of study. The CFP® and the ChFC® are common designations that require rigorous classes, examination, and ongoing continuing education. In addition, the CFP® certification requires three years of experience.

Of course, there is a big difference between what is required and what is necessary to provide a high quality service with excellent outcomes. This is what drives us to seek out educational opportunities that have an impact on our client’s financial success. In 2013, we spent approximately 340 hours in education related activities at Argus Financial Consultants. The time necessary to keep up with subjects such as taxation, investments, estate planning, and financial planning has grown considerably over the years. Be assured that we will continue to make our education a priority.

Tuesday, April 8, 2014

Using the IRS to Steal Your Identity

Scammers are taking advantage of our need to file our taxes to commit identity theft and fraud. IRS investigations of identity theft surged 66% last year according to a CNN article posted on February 19, 2014. Here are some common scams:

1. Phishing scams are when you get a bogus email or phone call from someone claiming to be from the IRS. You are asked to provide personal information often under the threat of a penalty or arrest. If you get a phone call or email, you can report it to 1-800-366-4484 or phishing@irs.gov.

2. Fraudulent tax preparers pretend that they are doing your taxes and really, they are stealing your identity. Often they will use your information to file a fraudulent return and pocket the refund. Make sure your tax preparer has an IRS Preparer Tax Identification Number (PTIN). Also, don’t use a tax preparer that bases their fee on the size of your refund.

3. Fraudulent websites are popping up that look like legitimate online tax preparers. Before you enter your information into an online preparation software, double check that you are in the correct site.

4. Some crooks are using stolen identity information to file fraudulent returns. While they keep the refund, you are left defending yourself against a charge of filing an inaccurate return. The IRS may take months to sort out the mess. In the meantime, you have to wait for your true tax return.

This is the time of year when we are getting lots of information in the mail that is necessary to do our taxes. Make sure you keep this information in a safe place. Don’t leave it laying around your house or the office. If you feel that you may have been a victim of a scam, let the IRS know as soon as possible.

Monday, March 31, 2014

It's a Balancing Act

As with an Olympic gymnast, success in reaching investment goals requires precise balance. Depending on our risk tolerance, time horizon, and objectives, a portfolio balances a mix of investments types to create the proper asset allocation. In order to maintain balance, the gymnast requires ongoing practice and training. It is not as difficult for our investments, but they do require some regular rebalancing.

In 2013, equities (stocks) increased on value by approximately 26% according to the S&P500 index. Bonds on the other hand were down almost 4% according to the Barclay’s Aggregate Bond Index. Without rebalancing, it is likely that portfolios have become more weighted towards equities in 2013. Now is the time to make sure your investments haven’t lost their balance.


All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Asset allocation does not ensure a profit or protect against a loss.

Monday, March 17, 2014

Should I take a Loan from My 401(k)?


Your employer has just put in a new 401(k) plan and now there is a loan provision! You've made some home improvement purchases lately and have been wondering how you can get some money to make life a little more comfortable. Should you take advantage of your company's new loan provision? Here are some pros and cons via FINRA.

If, after weighing the pros and cons, you decide a loan from your 401(k) is your best plan of action, remember the consequences of a default. Since 2008, 401(k) loan defaults are on the rise. Most of these defaults happen when the employee changes jobs and fails to repay the loans. CNN explains this in more detail. Contact your financial and tax advisor to decide your best course of action.

Thursday, March 13, 2014

In My Opinion the Simplest Tax Deduction Regardless of Your Income

Folks, let me start by saying please consult your tax professional for the application of the below to your personal situation.

I have recently seen a rash of folks frustrated with their tax rate that have good income and great savings balances. They are searching for deductions. These people all have one item in common and it has to do with health insurance. They all have an HSA plan at work, but are not fully funding it. The max amount for an individual for 2013 is $3,250 and for a family is $6,450. If you are 55 you can add another $1,000. The great thing about these are that you can contribute for the prior year up until April 15th, just like with your IRA. Go look at your tax return, line 25, front page. If there is nothing in that line and you have an HSA you are missing out!

Brian, what happens if I do not use the balance by the end of the year?

I’m glad you asked. You just keep it in the account and use it for the following year. FSA’s or Flexible spending accounts are accounts that you must “use it or lose it” by the end of the year.

Brian, My deductible is smaller than the single max and family max, why would I contribute the full amount?

Thanks for asking such a great question. You can use HSA money for health expenses, deductible, copays, eye appointments and dentist or orthodontist visits. If that is not great enough, some HSA’s allow you to move a portion of the money into an investment account so it can grow for future health expenses. If I changed the name from HSA to “Account that you get a tax deduction regardless of your earned income, that you can use for medical expenses tax free at any time and you can invest just like an IRA” do you think people would want to contribute more? I think so!!

If you have more questions let the fine people at Argus help you out.

Friday, March 7, 2014

2013 Tax Changes

The tax items for 2013 of greatest interest to most taxpayers include the following changes. This list is provided by Troy Ginzer, CPA at TAG Account. For more information visit tagcpa.net.

·         Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 % has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return).  The other marginal rates --- 10, 15, 25, 28, 33 and 35% --- remain the same as in prior years.  The guidance contains the taxable income thresholds for each of the marginal rates. 
·         The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.
·         The American Taxpayer Relief Act of 2012 added a limitation for itemized deductions claimed on 2013 returns of individuals with incomes of $250,000 or more ($300,000 for married couples filing jointly).
·         The personal exemption rises to $3,900, up from the 2012 exemption of $3,800.  However beginning January 1, 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $150,000 ($300,000 for married couples filing jointly).  It phases out completely at $211,250 ($422,500 for married couples filing jointly.)
·         The Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 ($80,800, for married couples filing jointly), set by the American Taxpayer Relief Act of 2012, which indexes future amounts for inflation. 
·         The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have 3 or more qualifying children.
·         Estates of decedents who die during 2013 have a basic exclusion amount of $5,250,000, up from a total of $5,120,000 for estates of decedents who died in 2012.
·         The standard mileage rates are as follows: a) Business - 56.5cents, b) Charity - 14cents, c) Medical - 24cents.
·         An additional 0.9% increase in the Medicare payroll tax  once an individual exceeds $200,000 in taxable salary and wage income and a new 3.8% surtax on "net investment income" once modified AGI is $200,000.
·         Medical expenses are subject to 10% of AGI for taxpayers under age 65.

·         All Americans starting January 1, 2014 will be required to have reasonable quality health insurance for themselves and their dependents or pay a penalty in 2014.  The penalty will be paid with Form 1040.

Troy A. Ginzer is not affiliated with LPL Financial.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that youdiscussyour specific tax issues with a qualified tax advisor.

Monday, February 24, 2014

Importance of Financial Advisor, CPA and Attorney Relationships

In the world of finance, tax and law becomes increasing more complex on a daily basis. As you do your taxes this year think about a few items: Does your CPA know your attorney? If not, does your CPA know your advisor? Does your estate attorney know your advisor?

This is the time of year we get many calls about tax information and what has to be sent to a CPA. When a client introduces us to their CPA they have a much simpler life because with their permission we can deal directly with that professional. Also, over the last few months we have had clients who have passed away and left family and a spouse behind. When we have a relationship with their attorneys and CPAs, we are much more equipped to handle the financial and legal challenges that lie ahead. As always, if you have questions on any of these items please reach out to one of us at Argus.

Friday, February 21, 2014

Tax Me Now or Tax Me Later

If you contribute to an IRA or 401(k) plan, one of the decisions that you face is whether you want your contributions to be Roth or Traditional. Roth contributions are made with after-tax dollars and grow tax free. As long as you follow the rules, you will be able to pull out your money tax free in retirement. Traditional contributions to an IRA or 401(k) are pre-tax and grow tax deferred. Your retirement withdrawals will be fully taxable.

So, which is the best option? Of course, it is not a simple answer. The first problem is that we can’t predict the future of taxation. Tax law will change many times in our lifetime, making it difficult to plan for the long term.

Theoretically, if tax rates are higher in the future, the Roth would be best for most people. Conversely, if tax rates are lower in the future, the Traditional would be best. Let me know if you know the answer.

For most folks, we recommend a plan that includes using both to diversify your future tax exposure. Ideally, you would look for ways to have your retirement funds in both types of accounts.

Of course, every situation is different. It is important that this decision is part of the overall plan that looks at your current tax situation and considers the future possibilities.


The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, if considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits and tax treatment of Roth IRAs. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tuesday, February 11, 2014

Protecting Your Personal Information and Identity

The protection of your identity, security and credit card information has been in the news the last couple months. The data breech over the holidays at Target has affected millions of people including my family. We received a letter from our bank that they were issuing a new card as we (my wife and I) had used our card at Target during the dates of the security breech. I have been monitoring our accounts on a daily basis for fraudulent activity.

Times like these make folks wonder what others are doing to protect their information. Obviously with being a financial firm we have quite a bit of financial and personal information on our clients. We have taken numerous steps to curb the possibilities of information being compromised. All cell phones and tablets have passwords, laptops are encrypted, desktop computers have passwords and timeout after no activity, all papers with information are securely shredded and emails with personal information are encrypted or password enabled. In the new technology world the threat is always out there, so we are making a conscience effort to do everything possible to keep our clients secure.

Monday, February 3, 2014

Don’t Be Generous with Scams

Of course not, why would anyone be generous with scammers? It happens. Unfortunately, it is growing fast. Fraudulent charities and scam artists that feed on your good heart. In the aftermath of hurricane Sandy, fraudulent relief solicitations were so common that alerts were issued by the FBI, the IRS, and FEMA to name a few.

They often adopt names that sound very similar to a well known charity. They contact you on the phone or by email. They are very good at sounding legitimate and tugging at your heart strings. Their victims are both the contributor and those in need.

Here are some ways that you can avoid contributing to the scammers:

1. Do not donate based on an unsolicited phone call or email.

2. Do not donate based on a text message.

3. If a solicitation sounds good, ask them to mail you their information so you can review it prior to making a donation.

4. Do not give personal information such as social security number, checking account number, or credit card number to anyone without first verifying that the organization is legitimate.

5. Stick to recognized charitable organizations.

Tuesday, January 28, 2014

A Week to Celebrate

Well, maybe not. The Federal Trade Commission has named January 13th through January 17th as Tax Identity Theft Awareness Week to provide people with tips on how to avoid being a victim of tax related fraud. There are two general types of fraud to be aware of.

The first is refund fraud. With refund fraud, the scammers use your stolen name and social security number to file a fake tax return with the IRS. Of course, this tax return results in a tax refund payable to the thieves. The big problem for you happens when you file your real return. After the IRS realizes it’s been scammed, they often will freeze your refund until it can all be sorted out. In addition, there is a major hassle associated with trying to clear things up.

The second fraud is employment fraud. The crook uses your stolen information to obtain employment. Victims of this fraud get a notification from the IRS that they have unreported income. Again, it takes months to sort out the mess and get things corrected.

Here is a summary of the tips to avoid being a victim of tax identity theft:

· File your taxes through a secure internet connection or take them directly to the post office.

· Be careful about giving your Social Security number to anyone. Ask them why they need it and what they are going to do with it.

· Shred old tax returns and documents that you are not required to keep.

· Ask to see the license and credentials of your tax preparer. Get recommendations and research them before you give them your personal information.

· The IRS DOES NOT email or text tax payers. Do not respond to emails claiming to be from the IRS. Do not provide personal information in response to an unsolicited email.

· Check your credit report annually. You can check your report at annualcreditreport.com.

· You can get more information at irs.gov/identitytheft

Monday, January 20, 2014

New Year's Financial Resolutions

“I am going to lose 10 lbs.” “I am going to eat better.” “I am going to go to the gym 3 times a week.” These are all common resolution topics around the holiday season. But what about making some financial resolutions to make sure you and your family stay on track? Here are a few New Year’s financial resolutions to consider:

Get your emergency fund to a comfortable level:
A lot of experts say to make sure you have 3-5 times monthly expenses in a savings account. That’s a great place to start, but more importantly is to get to the amount that is comfortable for your family and your particular situation. This may be $5,000, $10,000 or $30,000. Make it a point to accumulate enough cash so everyone in the family can sleep better at night.

Audit your insurance plan:
This means all insurance. Life, disability, auto, home, health. Some insurance prices are going up and some (like life insurance) can actually go down in price assuming good health. Make sure to pay attention to carriers, deductibles, co-pays and benefit amounts. You might find you are paying too much or don’t have the proper coverage.

Put together an estate plan:Don’t be intimidated by the name. An estate plan does not have to be that complex. An estate plan could consist of simply a will and medical power of attorney. Don’t wait until you and your significant other are going on a trip without the kids to start the process. Contact an attorney to guide you in the right direction. As part of your estate plan make sure everything is mapped out for your family to find if you are not around. Read last month’s blog article for more tips: Where is Everything?

Make a budget and follow it:
Sit down together and write down all of your monthly expenses. A budget is much easier to follow if it is written down and glanced at regularly.

Meet with your financial advisor:
If you do not have an advisor then interview a few until you find one you are comfortable with. Meeting at least annually with your advisor will keep you on task towards reaching your goals. Your advisor will help you make sure you are saving enough towards retirement, college education or any other savings goals. A good advisor will actually hold you accountable and help you complete your new year financial resolutions.